Business alliances are often overlooked or not given much consideration by small businesses, yet they can be vital in helping a company grow and prosper. All too often, small businesses think alliances are just for big businesses; as a result, they neither explore nor pursue them. However, they can be just as beneficial for small businesses as they are for large corporations. If a small business is serious about gaining access to new markets, capitalizing on technology, growing profits using shared resources, they should consider a business alliance.

It’s no secret, businesses that share resources can create greater efficiencies and become more profitable. Business alliances can increase synergies and mitigate potential risk, while allowing companies to work together toward common goals as they maintain their individuality. There are several types of business alliances, each with its unique attributes.

Now is the time to assess what your business brings to the table. What assets, either tangible or intangible, does your business possess that when leveraged with another company can unlock greater potential for each business?

Alliance opportunities can be developed with suppliers, customers, investors, complementary businesses and friendly competitors. Some alliances are natural matches, while others require some creative thinking. I’ve listed the different types of alliances below, along with a description and example of each. When reading through them, think about how your business can create the benefits of a win-win proposition with another company.

JOINT VENTURE

A joint venture is a contractual arrangement whereby a separate entity is created to carry on a trade or business on its own, separate from the core business of the participating companies. Businesses often come together to share knowledge, markets, funds and profits. In some cases, a large company can decide to form a joint venture with a smaller business in order to quickly acquire critical intellectual property, technology, or resources otherwise hard to obtain. Companies with identical products and services can also join forces to penetrate markets they wouldn’t or couldn’t consider without investing a tremendous amount of resources. Separation is often inevitable because JVs generally have a limited life and purpose.